UPDATE: Maxim Group Reiterates Buy on Cree; $38 PT
Maxim Group reiterated a Buy rating on Cree (NASDAQ: CREE) and a price target of $38.
Maxim Group noted, “With no major price cuts announced and reports of growth of mid-to-high single digits for our U.S. LED distributor contacts and 20%+ for its major manufacturing peers, we expect CREE's FY4Q12 revenue to approach the high end of guidance at $311m, ahead of the Street at $306m. While we are more sanguine about gross margins staying flat at ~35%, CREE's ability to hit guidance of 36% would bolster the case of margins bottoming. Finally, with reports of a strong launch of its new CR-series downlights, we expect guidance to drive Street estimates for 7% Q/Q higher and, in turn, help the stock break above its recent trading range. We maintain our Buy.”
Cree closed at $23.95 on Tuesday.
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